Park City School District is preparing for the legislative general session as questions swirl about tax reform
The tax reform referendum effort is hanging over the 2020 Utah Legislature’s general session.
With the deadline for collecting signatures set for less than a week before lawmakers are scheduled to convene, significant questions remain about the impact on the state’s budget if the law is delayed.
Education funding is at the center of many Utahns’ opposition to the law, and Todd Hauber, Park City School District’s business administrator, is keeping a close eye on how the issue will affect both the district and other school systems across the state.
“It was already going to be a big session, and if the referendum is successful, it will be even bigger,” Hauber said. “I think there are already, like, 130 bills filed under education. It’s already starting off to be a busy year.”
The tax reform bill that passed during a special session last month includes provisions to lower the income tax and make up the shortfall by taxing services and raising taxes on food and fuel. Opponents have until Jan. 21 to gather 116,000 signatures statewide to delay implementation of the bill until voters weigh in this fall.
If they are successful, the problems legislators were trying to fix, like ongoing funding for education and rebalancing revenue sources, will resurface, Hauber said. It would be as though the law was never passed.
But that’s not the only thing on his mind. Among the scores of other bills already proposed for the session, Hauber highlighted proposed changes for how sick leave is administered, standards and rules for early childhood education programs and a new school breakfast program. He also pointed to a bill aimed at increasing transparency in school finances, which he said could necessitate changing how he keeps the district’s books.
“That could turn my world upside down,” he said.
For Hauber, the seven-week session is filled with trips to the Statehouse, evenings spent reviewing bills, conferencing with other professionals tasked with overseeing school district finances and testifying in committee meetings about the effects of legislation on school districts.
Still, he claims it’s a fun time.
Hauber is the legislative liaison for an industry group called the Utah Association of School Business Officials; he’s in his third two-year term in the role. He said he thinks he was chosen for the position because of his history working for the Utah State Board of Education, which gives him a perspective about how proposals would affect school districts statewide.
He’s careful to say he’s not a lobbyist and won’t chase down legislators to advocate for or against a bill. But he’ll offer his expertise when asked and serve as a resource for lawmakers who want to know how a bill will affect school districts.
The Park City School District does not employ a lobbyist, Hauber said.
The funding problems that legislators are grappling with are real, Hauber said, and he credited them for trying to solve them in good faith.
“They are trying to set a foundation for the next 20 years — I think their intent is honorable,” he said. “How they get there is highly questionable.”
There is a constitutional requirement that income tax revenue go toward public education. In cutting the income tax, the tax reform law reduced potential education funding by around $600 million compared to what it would have been if left untouched.
While other industry groups are calling it a cut to education, Hauber argues that it is a reduction of future possible education funding, not a direct cut to current budgets.
“What is happening is that potential future revenue will no longer be available to fund public education,” he said.
According to the Utah State Tax Commission, individual income tax revenue grew the most from 2018 to 2019, accounting for $321 million, or nearly half of the total $773 million boost in state revenues.
Legislators have expressed a desire for more flexibility in the budget by removing that constitutional requirement tying income tax revenue to education funding, but Hauber said there would need to be assurances regarding alternate future revenue sources for education groups to get on board.
“There’s no way to do it without increasing property tax,” Hauber said of ensuring education funding keeps up with the state’s growth.
But property values in the Park City School District are high, and the district pays by far the most in “equalization” funds from property tax revenues back to the state. For the 2018-2019 budget, it was $6.2 million; in fiscal year 2019-2020, Hauber said it’s projected to be around $8 million.
“The more that the state relies on property tax to finance (education) means more property tax will come out of the community, but we won’t necessarily see that money come back to us,” Hauber said.
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